Seniors Housing & Healthcare
An Integrated Platform Serving Seniors Housing and Healthcare
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We’re committed to leveraging our industry-leading platform to help owners, operators and lenders succeed, even during turbulent times. Our client-focused experts, supported by years of experience and highly seasoned underwriters and analysts, are prepared to advise and guide you into a future defined by success and stability.
Seniors housing Research:
Q1 2024 Report Card
RESEARCH, INSIGHTS and news
Access the latest market-driven insights, research and news from Berkadia.
Berkadia’s David Fasano Adds Industry Insight to NIC’s Q1 Data Release
Seniors Housing Research: Q1 2024 Report Card
Assisted Living and Memory Care Communities, Detroit, MI | Sold by Berkadia 2024
Seniors Housing Communities | Financed by Berkadia 2024
“Berkadia Seniors Housing & Healthcare leads the industry in innovative and comprehensive solutions for even the most complex independent living, assisted living, memory care and skilled nursing projects across the country.”
Steve Ervin
Senior Vice President, Head of FHA/HUD and Seniors Housing Finance
Recent Transaction Spotlight
Investment Sales
Upscale Active Adult
Charlotte, NC
Brighton Gardens of Brentwood
Brentwood, TN
$11M
Hardy Springs
Dallas, GA
Mortgage banking
Assisted Living
Broken Arrow, OK
$16.7M
Fannie Mae
105 Units
Skilled Nursing
Twin Falls, ID
$8.3M
HUD 232/223(f)
60 beds
Assisted Living & Memory Care
Winchester, VA
$15.4M
Berkadia Bridge
73 beds
Seniors Housing Loan Programs
Berkadia Seniors Housing Fannie Mae Loan Program
Download Program Details | Connect with a Mortgage Banker
Fannie Mae offers financing solutions for acquisition, refinance, and renovation for existing properties. Berkadia has delegated authority to underwrite Seniors Housing loans, and that means fast decisions and creative solutions.
Eligible Properties
- Independent living, assisted living, assisted living with alzheimer’s, in any combination, or standalone alzheimer’s/dementia
- Continuing care retirement communities and properties with skilled nursing units may be considered
Eligible Sponsors & Operators
Sponsors and operators with a minimum of five years experience in the Seniors Housing industry and a minimum of five stabilized properties
Interest Rate & Terms
- Fixed-rates and variable-rates are available
- Actual/360 and 30/360
- 30 to 90-day commitments are available. Early rate lock feature is also available, allowing the borrower to lock a rate 45 to 365 days in advance of closing
- Terms ranging from five to 30 years are available
Berkadia Seniors Housing Freddie Mac Loan Program
Download Program Details | Connect with Mortgage Banker
Freddie Mac offers flexible loan terms and multiple financing options for a variety of Seniors Housing property types. The programs are specifically designed for the purchase or refinance of Seniors Housing properties. Berkadia has the ability to originate and underwrite Freddie Mac Seniors Housing loans.
Eligible Properties
- Independent living, assisted living, assisted living with alzheimer’s, in any combination, or standalone alzheimer’s/dementia
- Continuing care retirement communities and properties with skilled nursing units may be considered
Loan Features
5 to 30 years
Eligible Borrowers
- Sponsors and operators with a minimum of five years experience in the Seniors Housing industry and a minimum of five stabilized properties
Financing Options
- Fixed-rate mortgages
- Adjustable-rate mortgages
- Structured and affordable transactions including multiple loan pools
- Supplemental mortgages
Escrow
Fully funded replacement reserve, tax and insurance escrows are required
Early Rate-Lock
Available
Berkadia Seniors Housing 232-223(f) FHA-Insured Financing
Download Program Details | Connect with Mortgage Banker
Non-Recourse, fully assumable financing for purchases and refinances of skilled nursing, assisted living, and memory care communities.
Eligible Properties
- Project must be licensed (or certified in some jurisdictions) and comply with all HUD, federal, state, and local standards. Independent living is eligible up to 25% of total project beds
- Project must have been completed or substantially rehabilitated for at least three years and include a minimum of 20 beds
- Single asset /special purpose borrowing entity required
Loan Features
- Low, fixed interest rates
- Up to 35-year term, fully amortizing
- Non-recourse and fully assumable
- Eligible transaction costs, including certain owner elective repairs, are mortgageable
Mortgage Loan Amount
The mortgage is limited to the lesser of:
- 80% of appraised value (85% for non-profits)
- 100% of eligible transaction costs (refinance) or 85% of eligible transaction costs (acquisitions)
- 1.45x underwritten debt service coverage ratio
Prepayment
Standard prepayment schedule is 10% in year one, stepping down 1% annually, however, alternative prepayment structures are available subject to market conditions
Escrow
Monthly escrows for real estate taxes, property insurance, and replacement reserves
Transaction Costs
- Existing debt or purchase price
- Repairs not exceeding 15% of appraised value after completion
- Third-party reports (appraisal, engineering, phase I, and radon)
- First year MIP
- Financing and placement fees
- Borrower and lender legal fees
- Title, recording, and survey costs
- HUD application fee of 0.30%
- HUD inspection fee (greater of $30/bed or 1% of repair estimate)
Berkadia Seniors Housing 232 FHA-Insured Financing
Download Program Details | Connect with Mortgage Banker
Non-recourse, fully assumable financing for construction or substantial rehabilitation of skilled nursing, assisted living, and memory care communities.
Eligible Properties
Licensed skilled nursing, assisted living, and memory care communities, including independent living up to 25% of total bed countInterest Rate and Term
Loan Features
- Low, fixed interest rates
- Up to 40-year term, fully amortizing (interest-only during construction period)
- Non-recourse and fully assumable
- Combined construction and permanent loan
Mortgage Loan Amount
The mortgage is limited to the lesser of:
- 75% stabilized LTV assisted living (80% for non-profit borrowers) or 80% LTV for skilled nursing (85% for non-profit borrowers)
- 90% of certifiable transaction costs
- 1.45x underwritten debt service coverage ratio
Prepayment
Standard prepayment schedule is 10% in year one, stepping down 1% annually, however, alternative prepayment structures are available subject to market conditions
Escrow
- Working capital escrow of 4% of loan amount, unused portion will be returned to borrower
- Initial operating deficit calculated by HUD and available upon issuance of certificate of occupancy
- Minor movable equipment
- Monthly escrows for real estate taxes, property insurance, and replacement reserves are requiredAffordable/Rent Assisted (Single-Stage Processing)
Transaction Costs
- Purchase price of land/buildings or existing debt
- Certified construction costs, bond premium, builder’s profit allowance, and other fees
- Architectural fees for design and supervision
- Appraisal, engineering, and environmental inspection reports
- MIP during construction
- Interest, insurance, and real estate taxes during construction
- Legal, organizational, audit, title & recording, and survey fees
- HUD application fee of 0.30% & HUD inspection fee of 0.50%
- FF&E – major fixed and movable items
Berkadia Seniors Housing 232-241(a) FHA-Insured Financing
Download Program Details | Connect with Mortgage Banker
Non-recourse, supplemental financing for repairs, additions, and improvements of properties with existing FHA-insured loan.
Eligible Properties
Project must be insured under section 232 mortgage
Loan Features
- Low, fixed interest rates
- Non-recourse and fully assumable
- Eligible transaction costs, including certain owner elective repairs, are mortgageable
- Terms of first mortgage remain unchanged
Mortgage Loan Amount
Lesser of:
- 90% of eligible costs
- 90% of as proposed value less 90% of as is value (determined by lender ordered appraisal)
- 90% of stabilized value less all outstanding debt
- Minimum underwritten DSCR of 1.45x when combining first and supplemental mortgage debt service
Maximum Term
Coterminous with existing mortgage unless otherwise approved by HUD
Prepayment
Standard prepayment schedule is 10% in year one, stepping down 1% annually, however, alternative prepayment structures are available subject to market conditions
Escrow
- Working capital escrow of 4% of loan amount, unused portion will be returned to borrower
- Initial operating deficit calculated by HUD and accessible upon issuance of certificate of occupancy
- Minor movable equipment
- Monthly escrows for real estate taxes, property insurance, and replacement reserves are required
Transaction Costs
- Purchase price of land, buildings or existing debt
- Certified construction costs, bond premium, builder’s profit allowance, and other fees
- Architectural fees for design and supervision
- Appraisal, engineering, and environmental inspection reports
- MIP during construction
- Interest, insurance, and real estate taxes during construction
- Legal, organizational, audit, title & recording, and survey fees
- HUD application fee of 0.30% & HUD inspection fee of 0.50%
- FF&E – major fixed and movable items
Berkadia Seniors Housing 232-223(A)(7) FHA-Insured Financing
Download Program Details | Connect with Mortgage Banker
Non-recourse, fully assumable, streamlined refinance of existing FHA-insured loans.
Eligible Properties
Project must be insured under section 232 mortgage
Loan Features
- Low, fixed interest rates
- Non-recourse and fully assumable
- Refinance without exiting HUD Section 232 program
Mortgage Loan Amount
Lesser of:
- Original principal balance of existing insured mortgage
- Unpaid principal balance of the existing mortgage plus eligible transaction costs including certain owner elective repairs)
- 1.11x underwritten debt service coverage ratio
Maximum Term
If supported by property condition report, HUD may approve a term extension to the lesser of:
- 12 years beyond the remaining term of the existing mortgage
- Original loan term
Prepayment
Standard prepayment schedule is 10% in year one, stepping down 1% annually, however, alternative prepayment structures are available subject to market conditions
Escrow
Monthly escrows for real estate taxes, property insurance, and replacement reserves are required
Transaction Costs
- Existing debt
- Prepayment penalty
- Repairs (not exceeding 15% of appraised value after completion)
- Property condition report (if term extension is requested)
- First year MIP
- Financing and placement fees
- Borrower and lender legal fees
- Title, recording, and survey costs
- HUD application fee of 0.15%
- HUD inspection fee (greater of $30/bed or 1% of repair estimate)
Client Stories
Seniors Housing Community
Berkadia’s client was facing a loan maturity with a four-property cross-collateralized portfolio. The projects were nearing stabilization from the COVID-19 pandemic, however, the existing lender no longer wished to remain in the deal via a loan extension. Working with the existing lender, Berkadia Managing Director Steve Muth determined a release price for the subject that left a low enough loan balance on the remaining three projects for the client to achieve their desired debt terms.
Upscale
Active Adult
Berkadia Seniors Housing & Healthcare just announced the sale of an active adult community in Charlotte, North Carolina. Berkadia worked together with the seller to identify a capable buyer who had the ability to purchase the asset at the sale price needed by the seller. This required managing the seller’s expectations of a reasonable price of sale while finding a buyer who was willing and able to pay an appropriate price in this rapidly changing environment.
JASA is a longtime Berkadia client and non-profit organization committed to the safety, health, and well-being of seniors. Recently, Berkadia financed $46M+ in loans for two JASA properties under the HUD 223(f) program. In addition to repairs and upgrades, the higher leveraged, low interest rate loans enabled JASA to allocate funds to programs benefiting their residents.
Leadership
Mortgage Banking
Investment Sales
Want to learn more?
At Berkadia, our capital strength, market knowledge, breadth of experience and deep industry relationships ensure that we can deliver the certainty of execution that our clients depend on.
Read our seniors housing & healthcare brochure today and learn more.